Levi Thompson's new company Inmatech Inc., a UM spinoff, is finishing work on a prototype device that promises to allow the makers of electric vehicles to replace expensive and volatile lithium-ion batteries with traditional, and much less expensive, lead-acid batteries.

Levi Thompson hopes to ride another emerging battery technology back to the top of the market.

Thompson's new company — Inmatech Inc., a University of Michigan spinoff — is finishing work on a prototype device that promises to allow the makers of electric vehicles to replace expensive and volatile lithium-ion batteries with traditional, and much cheaper, lead-acid batteries.

In the next week or two, Inmatech — short for innovative material technology — expects to finish making the first prototype of a supercapacitor, which stores energy and reduces the load on electric-vehicle batteries during the stop-start phase.

The development of the prototype was funded by two small-business innovation grants totaling $610,000 from the National Science Foundation and a variety of smaller grants and awards, including two awards totaling $25,000 presented at June's annual Great Lakes Entrepreneur's Quest business plan competition in Lansing.

In 1991, Thompson and his wife, Maria, co-founded Ann Arbor-based T/J Technologies Inc., which developed materials for the lithium-ion batteries that would power some electric vehicles. Of particular interest was a cathode material made from lithium-ion phosphate.

In 2006, at the top of the market for suppliers of electric-vehicle battery components, T/J was sold to Massachusetts-based A123 Systems Inc., then one of the hottest battery companies in the world and about to get even hotter.

The sale price of the company, which had about 30 employees, was not disclosed.

In 2009, A123, which had raised $437 million in an initial public offering, made headlines when it announced it would invest $600 million in manufacturing facilities in Southeast Michigan, supported in part by a U.S. Department of Energy grant of $249 million.

But A123 didn't fly high for long. In December, Wanxiang America Corp., the U.S. arm of the giant Chinese supplier Wanxiang Group, acquired the automotive, commercial and government assets of A123 and its plants in Livonia and Romulus for $260 million in a bankruptcy auction.

Maria Thompson, who was named by Crain's in 2007 as one of the region's Most Powerful Women, is not involved with Inmatech. She is entrepreneur-in-residence at the Birmingham office of Florida-based Arsenal Venture Partners and vice chairman of NextEnergy, the Detroit-based nonprofit that promotes clean energy technologies.

Levi Thompson is the Richard Balzhiser professor of chemical engineering at UM, a professor of mechanical engineering and director of the school's Hydrogen Energy Technology Laboratory. At the laboratory, his Thompson Research Group of 20 researchers works on projects involving photovoltaic materials, fuel processors and clean energy applications for nanoscale carbide and nitride materials.

Inmatech grew out of the group's research, with the company, founded in 2010, having licensed two patents from UM. It expects to license another patent, the result of joint research between Thompson's group and the nonprofit Fraunhofer USA, a Plymouth-based part of a global nonprofit organization that focuses on applied research and development.

Fraunhofer has helped Inmatech with validation research and, through its worldwide contacts and affiliations, can help Inmatech reach potential customers.

Inmatech's supercapacitor is cubelike, about 5 inches on a side. It has nine energy storage panels made up of vanadium nitride, a rough-textured compound with a huge amount of surface area relative to its weight.

Thompson said the material has up to 100 square meters of surface area per gram of weight. That means there are a lot of spots to which electrons can bind, resulting in high levels of power storage per volume.

Saemin Choi, Inmatech's chief technology officer and co-founder

Inmatech has four full-time and two part-time employees and expects to soon begin ramping up manufacturing of thousands of prototype supercapacitors. These prototypes will be used for testing by worldwide makers of electric bikes and scooters over the next year or two. The plan is for them to evaluate the supercapacitors and, if they like what the see, incorporate them into their electric vehicles.

Saemin Choi, Inmatech's chief technology officer and co-founder, said that e-bike and e-scooter makers will be expected to pay about $2,000 for prototypes used in testing but that actual devices for vehicles will come down in price to between $200 and $250 as volumes increase.

Thompson said revenue from prototype sales is expected to exceed $1 million next year.

If the supercapacitors are widely adopted in the e-bike and e-scooter markets, Inmatech will try to enter the auto supply chain.

The real value-added proposition for manufacturers, Choi said, is that if Inmatech's supercapacitors work out as expected, they could supply enough power to allow vehicle makers to use lead-acid batteries instead of the more powerful lithium-ion batteries.

"They can downgrade from lithium-ion batteries, which can cost $1,000, to lead-acid batteries, which can cost as little as tens of dollars," he said.

Thompson said he has let local venture capitalists know what Inmatech has been up to and has done likewise for the angel investors who backed him at T/J Technologies.

"We made a lot of money for our angel investors at T/J," Thompson said. "The conversations we've had with investors has been, 'When we're ready, we'll let you know, and what we have to tell you will get you to write checks.' "

Said Chris Rizik, CEO of the Ann Arbor-based Renaissance Venture Capital Fund: "Levi is really brilliant, and he and Maria had established an excellent pathway for T/J, particularly with military applications.

"T/J was, in many ways, the best performing and most valuable part of A123."

Rizik said Thompson's reputation and T/J Technologies' history will open doors to area venture capitalists when he is ready to take on equity capital.

Dan Radomski, NextEnergy's vice president of industry and venture development, said Inmatech is a prime example of the support structures helping the state's emerging tech companies.

He credited UM's technology transfer office, which funded Inmatech's patents and offered mentoring help from Jack Miner, a startup specialist who recently was named director of UM's Venture Center; the Great Lakes Entrepreneur's Quest, whose volunteers help start-ups hone their business plans; the Michigan Small Business and Technology Development Center, which provided a grant of $40,000 in March; and NextEnergy.

NextEnergy has helped Inmatech identify state manufacturers with which it is in discussions to do its large-scale prototyping and manufacturing.

"Inmatech is a pretty promising early-stage venture," Radomski said. "Everyone knows Levi's track record and that he's the genius behind the technology."